If you increase demand, is it not the same as decreasing supply? But doesn't a deflationary money work best if you have a fixed income?
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If you increase demand, is it not the same as decreasing supply? But doesn't a deflationary money work best if you have a fixed income?
No and no.
"Money is different from all other commodities: other things being equal, more shoes, or more discoveries of oil or copper benefit society, since they help alleviate natural scarcity. But once a commodity is established as a money on the market, no more money at all is needed. Since the only use of money is for exchange and reckoning, more dollars or pounds or marks in circulation cannot confer a social benefit: they will simply dilute the exchange value of every existing dollar or pound or mark. So it is a great boon that gold or silver are scarce and are costly to increase in supply. But if government manages to establish paper tickets or bank credit as money, as equivalent to gold grams or ounces, then the government, as dominant money-supplier, becomes free to create money costlessly and at will. As a result, this 'inflation' of the money supply destroys the value of the dollar or pound, drives up prices, cripples economic calculation, and hobbles and seriously damages the workings of the market economy."—Murray Rothbard
My question wasn't about what many means, but if an UBI is implemented, should it be inflationary or deflationary. At least from I gather you would like it to be pegged to commodity?
A UBI can't work no matter how you try to structure it, unless you can find a way to structure it voluntarily. The instant you insert a coercive monopoly system, you guarantee waste, abuse, and economic destruction regardless of your intentions. An inflationary UBI doesn't directly rob the productive economy, but it erodes the value of all currency in circulation. A deflationary UBI would require far more massive wealth destruction than even that. It simply can't work in either case as anything more than a short-term power grab ensuring the support of a dependent class.